Morgan Stanley (MS) — the last major investment bank to report earnings — soundly exceeded market expectations during the first quarter of 2018, primarily driven by an increase in equity trading as well as a lower corporate tax rate, which allowed other major national banks also to report higher profits.
After its rivals, JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) set the tone for higher profits, expectations for the quarter had been relatively high.
The bank’s quarterly profit during the first quarter surged 38% to $2.67 billion from $1.93 billion a year ago, while EPS jumped 45% to $1.45. Revenue came in at $11.08 billion, an increase of 14%. The bank’s share price rose about 2.5% to $54.44 in pre-market trading.
Morgan Stanley’s sales and trading revenue surged 26% to $4.40 billion due to an increase in the equities trading revenues that rose almost 27% to $2.6 billion. This rise in equities trading was due to strong performance across the bank’s products and regions and higher client activity. Goldman Sachs earlier reported a 31% rise in its total trading revenue.
Morgan Stanley, under its CEO James Gorman, set out new financial targets early this year. The update included a cost-to-revenue ratio of about 73%, ROE of 10-13% and annual pretax profit margins of 26-28% for wealth management. It appears that the bank can easily attain most of these targets, considering the impact of the new tax law.
Most Popular
What to look for when CVS Health (CVS) reports Q3 earnings
Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain
eBay (EBAY): A few factors that helped drive growth in Q3 2024
Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,
CVX Earnings: Chevron reports lower revenue and profit for Q3 2024
Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to